5 Breakout Stock Plays: Must-See Charts

Focus on trend, price and volume, and the charts do all the talking.

Another stock that's closing in on a major breakout trade is Tetra Technologies ( TTI), which is an oil and gas player, focused on completion fluids and associated products and services, production testing, wellhead compression, and selected offshore services. This stock has been hit hard by the sellers so far in 2012, with shares down more than 35%.

The chart for Tetra Technologies shows this stock has been downtrending since July, with shares dropping from a high of $7.57 to its recent low of $5.35 a share. During that downtrend, shares of TTI consistently made lower highs and lower lows, which is bearish technical price action. That said, the stock has recently started to see some high-volume spikes higher and it's now moving within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in TTI once it manages to break out above some near-term overhead resistance levels at $6.10 to $6.22 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 727,048 shares. If that breakout triggers soon, then TTI will set up to re-test or possibly take out its next significant overhead resistance levels at $7 to $7.50 a share. Any high-volume move above $7.57 would then put $9 into focus for TTI.

Traders can look to buy TTI off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $5.55 a share. One could also buy off strength once TTI clears $6.10 to $6.22 with volume and then simply use a stop a few percentage points below its 50-day at $6.10 a share.